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Mad Money

News/Business. (2012)




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Starbucks 16, Cramer 8, Europe 6, New York 4, California 3, China 3, Us 3, Jim Cramer 2, Michigan 2, Darden 2, Sandy 2, Washington 2, Russell Goldsmith 2, India 2, America 2, Beth 2, Toyota 2, Ford 2, Atlanta 1, Southern California 1,
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  CNBC    Mad Money    News/Business.  (2012)  

    December 4, 2012
    11:00 - 12:00am EST  

i'm jim cramer. welcome to my world. >> you need to get in the game! >> go out of business and he's nuts! they're nuts! they know nothing! >> i always like to say, there's a bull market somewhere. >> "mad money." you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. i'm not here to make friends. my job is not just to teach and entertain, but to educate. so call me. all right let's be honest. if you are like me, and you are thinking this whole kit and
caboodle, it is getting real on exhausting. it's getting real on the market. one, it's very hard to pry off. and today's blah action again. nasdaq giving up 1.87%. fortunately we'll hear from a real banker. later in the show. heard about a weakened consumers today from not only than darden. a particular favorite to the "mad money" stf. stock pummeled and finished down. a stable operation. it yields an astounding 4.22%. scoop it up. but, may not be the protection.
it doubles the tax on dividends. can't be in there saying -- darden. one of the biggest retail juggernauts. the gap. sales have become sloppy to surrender $3.57 or 10%. although that doesn't spell the death of retailers, we go off the charts tonight. sectors are really doing -- how are they doing? we just witnessed -- relentless pressure in the oil sector. the department doesn't believe going over the cliff will stifle energy command. today is the first day when the group got any lift at all. so what do we do? people are worried the economy is slowing because of the cliff. so what do we do? is it game over for equities should i take my -- hall of fame
today and just go home? no, no, no. let me first say absolutely not. we simply have to get eveninger to a cliff resolution or to a situation where no one expects resolution. going with the latter, hey, that is new. let me walk you through here. today last week. last week, genuine hope a deal would get done. today, last week. if you recall, we heard from a host of executives. they met with the president. came out, the mic in their faces. they felt like compromise was in the air. compromise was real, imminent. even heard from the always skeptical ceo of goldman sachs. far apart. it could be hammered out without real difficulty if it were in the private sector. behind the scene, from skeptical to more positive. when i heard those execs touch base with them and spoke with them on both sides of the aisle
i thought there might be more common ground, but in the last 72 hours many came to the conclusion, partly me because i went down to meet, common ground, some a loser. and the refusal to negotiate and to never raise taxes. and ensuring of a deal, we are getting no deal they can't rise above, as a matter of fact. rising above is the enemy of what they think is right. so what do we need to do? what has to happen? it's simple. the market must disabuse itself of the notion the deal is even possible, and instead accept that the president and the congress is going on vacation without the notion. the fiscal cliff glasgows from being half full to half empty that's where we want it, and once it's half empty, it's much more immune to disappointment.
that's because those hoping for a deal will be gone. checked out, sold. replaced by three types of strongholders. get this. first like when the debt ceiling was raised. a move that countered for a huge chunk of the markets. these people believe that some kind of deal is inevitable. they think selling now is tantamount to giving up the bottom. the second set. they feel it won't have much of an impact on the economy. they believe we won't go into recession and the whole thing is over, done. mellow drama even. they think fearmongers. and this is their group of strong holders. a little time passes, they think, hey, should be better off going over the cliff. rich will pay more of their fair shares and higher taxes on dividends. government spending sliced where it should be and and the bloated defense budget. unnecessary social programs. me?
i think we aren't where we need to be yet when the it comes to abandoning all the hope. i think the postfiscal cliff world has -- not to matter. those people are polyannas. i think we go into a recession with lots of layoffs and the fiscal cliff was designed to compromise. the cliff was designed to scare legislators into rising above politics and compromise. everyone knew about the growth. just like in europe. means it could be, in fact, reduced dramatically. fewer jobs, larger deficit. not smaller. and the federal reserve that's throwing up its hands, can't do anything. as i said last night, it doesn't matter. we can pick our stocks and buy them down. like the fabulous names, amazon, ulta salons. buy them down in scales like i outline in the book "real money." now suggesting other groups giving you a bang for the buck. new groups betting that the hope
will be squeezed out and the bottom gets put in before a deal is made -- or not. why not? we know the auto market is for 11 years now and we have been sweet on ford domestically. before sandy. where are we internationally? europe. what are some of the other key area, though? i think latin america, though. i think it's coming back. asia already turned. here's the new piece of data. i think europe could be stablized. ford is the one to watch. you get that thing at 11 or blow. i'm out blessing it. haven't done that in a while. in europe i'm thinking that i'm sanguine. excited about ford. we have ample evidence today that i'm right. affordability is skyrocketing. the rates remained too low. homes down sharply. and pricing is moving up in california, nevada, arizona all things we learned from the luxury home builder toll today. oh, that's fine.
they leave out the most important fact that i hadn't heard from anybody, let alone toll brothers before. demographic play, how the company's chairman talked how demographics are going to take over. household formation is unnatural but because of the great recession. now at least it's picking up. there should are several new home buyers out there because of pent-up demand. well, from the delay of creation of new families, which is highly unusual in a country like america. what makes that so special? the fiscal cliff could be a big deal for sure. but what could trump the fiscal cliff, study this. it's the need to get out of your mother-in-law's house. get your own home. intuitive concept for those, when you think about it. we got to break here as toll brothers actually down on the news today because the market's so darn tough. i expect downgrades tomorrow
from people who don't believe things can stay this strong and that could be your strong to be analysts who always downgrade ar the report. here's the bottom line. we need hope to be vanquished. we need it spindled, mutilated. chex out the holders, thinking it's imminent and leave the room and then return to what i've been tracing and huge cycles of pent-up demand. buy them on the way down. never on the way up. you can take your time. do not leave this market wholesale. who the heck knows when and from what level you can get back in. why don't we go to tom in new york. tom? >> caller: hi, jim. could this offset same-store sales and make it a buy? >> i think it moved already. one of those stocks that moves in gigantic gobs, to speak and
had its gob and i don't want you to come in now. not a great operator. one of thebounces up and down, it's not a great stock. you have to return to the growth stock, autos and the housing plays. take your time. buy on weakness. hope is still not dashed enough to make this market immune from more disappointment from washington. "mad money "will be right back. coming up, shop until you drop? the holiday shopping season is in full swing, and the only thing more competitive than jockeying for a position in line is the cut-throw clash of retailers again retailer. tonight, jim cramer is helping you on a holiday edition. and something's brewing. alongside its coffee for year,
could concerns about starbucks move into tea mean it's time to lay off the caffeine, or is this your chance to fill up your cup before these shares really get percolating? cramer's grinding through the facts. plus, rise above. while washington trades offers, cramer's keeping you one step ahead of the fiscal cliff fiasco. tonight, a read of the regionals from the ceo of citi national bank. find out if you should be making a deposit. all coming up on "mad money." don't miss a second of "mad money." follow@jimcramer on twitter. have a question, tweet cramer, #madtweets. give us a call at 1-800-743-thchlt. >> announcer:. miss something? head to "mad money"
with the fiscal cliff looming less than a month away you might think certainly sectors would be getting hammered right now. not the obvious ones like
defense. given the defense budget will be cut dramatically if our leaders don't reach a compromise, take retail. if we go over the cliff, something i've been telling you as of this week, more likely by the day, not less, that will deal a huge blow it purchasing power of most americans. think about it. tax rates go up. >> boo. >> the payroll tax holiday goes away. [ buzzer ] unemployment benefits expire for most people -- [ baby crying ] and that's is not even accounting for the layoffs. that's just being cautious. put it together, unless we get a deal, which won't be bad news for the single biggest consumer play out there, which is retail. so even though we're having a real good holiday shopping season that we're seeing so far. pbh told us that. you expect retail to be in
trouble. once the holidays ends, things can get a whole lot worse. not just the fiscal cliff. two weeks ago aggregate retail sales that showed a 3% decline. last friday's gdp indicated that growth and personal consumption decelerated to 1.4%. these are not encouraging numbers. incomes are flat and hurricane sandy shut down the northeast wealthiest parts of the country, for days and in some cases for weeks. even though we have had positive numbers from companies like home depot and lowes, you think it would be from the proverbial -- >> the house of fame. >> or at least the group flat lining. get that? isn't happening.
it's xemexemplified by the rth. the retail etf, performing astonishingly well. tonight we're going off the charts with the help of ed ponce and ummwhom i just love, why it so strong. seeing that the headlines seem to be missing. remember, one ofs reasons i went back to ed, he is the guy who nailed the positive direction totally against the grain of the euro. back in september. calmed bottom at the euro for heaven the sake right before the german and the bailout started spiraling higher. according to him, a according to a guy who went against the grain then and was right, retail might actually be the most attractive area to own in this whole market. look, look.
look the market based on the markets, retail might be the most attractive area to own in this whole this is it. excellent proxy for the whole group. it really does work. you can see from the year earlier in october. the rth bottom. november 21st, this is the spot here, it has come roaring back. ponce points out two important things that happened. first the etf completed at almost 50% pullback. so here. see? this is the 50%. almost 50% pullback. excuse that. okay. and 50% retracement like we've got there. one of the key levels where technicians think it's almost a security -- security will often change course when you get down to 50. okay? that's a key, key term, like a seesaw. the second thing has to do with the moving average convergence,
divergence indicator or as we call it the mac d at the bottom of the chart. divergence indicator. a momentum indicator used to detect changes in a stock trajectory not after that happen or during they happen but before they happen. so it's useful to you and me. november 211, ponce said that the mac d int kader indicator gave you a classic signal. these things put it back to the high for the year now. the rth had stayed above the 200 day moving average. there, ma, moving average. the red. okay? and this is how it stayed. remember? it never took out the 200 day moving average. that's a very important -- long-term measure of the etf trajectory. when i was in the game, used the 200-day as my benchmark. a few days ago, we got what he
the ponce called bullish development. the 50-day moving average, a much shorter term measure of its trajectory. not one i care for but that's okay. i'm not in the charge here. when that happens, the chart followers tend to jump onboard. ponce knows that the rth is 1% below the all time closing high right now. very little resistance. and it could be smooth sailing for as far as the eye can see. wish i were taller. anyway -- doesn't everybody? i don't know what -- anyway, ponce says he would only the rth right here and he attituded his position a couple developments on the next chart. go to the ets hourly chart. a chart where each tick is an hour of trading. i used to love to play with these. ponce wants one of two things to happen. either breaks out above 46.
just above the all-time high. real breakout. that could be the catalyst for the next rally or also a buyer in the rth pulled back to around 45. pay attention to this. this is really important. he wants the rth to break out of 46. this $45 level has acted here. believe it or not, to me i was worried. he said listen, it is in the sweet spot. the rth could be primed for another rebound. he thinks this is a good sign.
we look at the components of the rth and he is encouraged that there is enormous adversity here. apparel retailer limited brands. that suggests that the retail sector should remain resilient. i was worried that we didn't close above 45. poncy isn't worried. my view, though, i'm more concerned about the fundamentals here and i worry more that we could have situations like the gap today. it got hammered on rumors of weaker sales. wal-mart missed its quarter. i'm more concerned about that. i got -- that is another channel i think. there are plenty of real worries out there. especially the fiscal cliff. in this grim environment you can
find sectors that are holding up better than you might think. poncy says the pull back in retail might be just the moment that you want to pull the trigger to this key sector index. wouldn't that be something? stay with cramer and we will be right back. >> coming up. something is brewing. starbucks has been serving up solid returns. but could concerns about its moving to tea mean it is time to layoff the caffeine or is this your chance to fill up your cup before the shares really get percolating? cramer is grinding through the facts next.
tomorrow we are going to hear from one of my favorite companies and it is starbucks. having its biennial analyst day. right now it is more than ten points off its high for the year. i think it could mark the beginning of the stock's next big rally. you can follow along at a service that i do with the street. tomorrow i expect a terrific story.
i'll give you a preview. lots of people ask me how i would approach this meeting. if i were at my hedge fund which i retired from years ago. what would i want to hear from the company to see if i could buy more or sell? first of all, why does this meeting even matter? it is every other year. they are a really big deal for people. the company has had its last analyst day in 2010. starbucks made its promises. one of the reasons i'm so excited about the event is they deliver. they told you about it and then they delivered. for example, last year they told you about how they planned expansion in china.
they said china would be its second largest market. schultz talked about getting into the tea business. i mention all of this so you understand that starbucks doesn't go in for idle chatter when it has these meetings. it has a terrific track record of following through on its plans. we want to know how the u.s. business is doing. and you need to hear about international. europe and especially china. starbucks is competing with keurig. don't forget, green mountain, it has been up huge.
starbucks should tell us what it is going to do with its cash. maybe a special dividend. they have the cash to do it. i prefer them to grow with the money. this is a major bone of contention with the bulls. i think starbucks branching out is good. the bears, they seem to think that the coffee could be played out. starbucks will tell us about the new juice store concept and the bakery chain. maybe it will give us insight to what could end up being one of the three top markets for starbucks. india. i can't wait to hear about the projections about india. and of course they need to address teavana. i thought this could be a terrific move.
teavana gives the company a chain of tea stores that seem to be quite popular. the earnings as early at 2013. not just the cute tea bags. like i want to add some hot tea. i think it could turn out to be howard's third place. this time for tea drinkers, it has become a hot button with the short selling community. those guys affirm that shorting teavana come from reports the company's tea are contaminated with pesticides to the point where 100% of the samples violate u.s. laws. the company is sticking to its story that it sticks to the standards.
my colleague david faber says that there are a huge number of hedge funds shorting this thing because they believe that the deal could fall through. they are thinking it is ortho. we will be listening when starbucks talks about teavana tomorrow. let me give you the outline so you can understand why i'm so bullish about the stock. it is a high quality growth stock in a low-growth world. they are putting up new stores all over the globe. i expect to hear it is doing better than yum. starbucks has high end stores. may seem like there is a
starbucks in every corner in america. it is the highest quality of problems. it needs to keep the lines shorter. i know they don't control the airports but please, add like five more starbucks to every airport i've been to. the company is improving the efficiency of the stores. they have the pods that you put in the keurig to make coffee. and now they have the sumatra. they have the keurig alternative, the barismo. it could be a good year for starbucks. but 2013 should be a good year too. they have had to fight against
the head wind of high coffee prices. now the price has come down big, over 30% from its highs. so what was once a major head wind is now a tail wind. it has knocked 20 cents off of the earnings per share. the decreased cost of coffee should add nine cents. here is a great thing for howard shults, not for me. you want one, ask for the cramer while you are there. starbucks sells well be low the company's five year average. and it is a major discount to other high growth food chains. here is the bottom line. this company has a fabulous story to tell.
it is a buy into any fiscal cliff-induced weakness going forward. let's go to beth in new york. beth. >> after adding $100 million in share buybacks, where could chipotle mexican grill be headed? >> i like the fact that everyone has given up on them and they are now ready to expand the shop house kitchen thing. i think the $235 to $250 i said they bottomed but i'm bullish on them. need a boost? starbucks could be the right brew. they have a great price and because teavana is good. the lightning round is coming up next. >> keep up with cramer all day long. follow @jimcramer on twitter.
it is time for the
lightning round. we are both kicking it back and forth whether to pull the trigger. you should have one too. knock out ko. allen in michigan. >> jim, booyah. i'm currently holding sprint and i've had a pretty decent gain. >> i don't want you to take that gain. i want to buy one. do not sell sprint it is a good one. matt in michigan. >> i was wondering about toyota or ford.
>> i pulled up with the subaru guy. their business is good. i prefer ford to toyota. tracy in arkansas. >> yes, booyah. >> ctlp or cplp. >> okay yeah. it is an mlp. i've not like international shipping. we are going with the tried and true. let's go to bo in missouri. >> tell me about pepsico. >> i don't think it does
anything either way until next quarter. i want to buy berkshire hathaway. a great housing play. let's go to corey in north carolina. >> how about the red skins last night? >> alfred morris has put me at 7 and 6 in my fantasy league. the pringles is good. raw costs coming down. management has it together and kellogg is for me. and that is the conclusion of the lightning round. coming up. rise above. cramer is keeping you one step
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never underestimate the importance of the banks. all anybody can think about is the fiscal cliff. eventually that situation will be resolved. once the cliff is behind us we could think about what would make this market go higher. we are never going to get a sustained rally unless the banks are onboard. goldman is hosting a big financial services conference. i want to focus on a regional bank.
city national is a business bank. it makes commercial real estate loans and also they cater to the wealthy. mostly in southern california and nevada new york city, nashville and atlanta. this is a well run bank. let's check in with russell goldsmith and find out where this bank might be headed. i don't know anyone in this world who has the pulse of wealthy people the way you do. i need to know whether they are quaking about the increase of possible capital gains.
will it be business as usual? >> great to be with you. appreciate the support. i think we have been seeing for well over six months, it falls into two groups. a lot of people are sitting on their hands. deals are getting called off. i'm not going to borrow until i know where they are going to drive the economy. there is always a slice of people who see opportunity with that. that is what city national and i would say a small minority have done. but most people are sitting on the sidelines waiting to know what is my health care cost and depreciation schedule. >> you have these big banks moving into wealth management.
your kind of people don't want to be in that business. >> wealth management is a science and an art. pushing products that maybe you are shorting on the right side. we try to tailor it. we have a full array to meet the needs of our clients. you've got to have the capabilities to meet the needs of the client. >> i want people to know that i've known this bank. it is where you went for catered treatment.
california is a growth state. >> absolutely. people are starting to wake up at the "new york times." job creation we're number one, unemployment is coming down. the state are projecting a surplus for the state budget so stability would come in handy and we have all of these world class industries that are helping the country. we got to get the strike solved. >> that's a billion dollars a day. what is happening?
>> a small number of people are holding it back. i think what they ought to do is go back to work while they mediate this thing. >> you are feeling better. i think the whole country is being tied up about this thing. >> beyond that, california housing prices are up. inventories are down. a number of good things are happening. >> we get a lot of publicity. we are really pleased. through this whole process, we stayed profitable. we bought rockdale investments
here in new york and we bought another firm. broadened out and deepened our capabilities. and our bank with the number of bank purchases with the fdic. >> a lot of the analysts, they make this point very clearly. pressure will be on your stock because of the net interest margin. as long as the fed keeps rates low. do you see any change there? >> bernanke has made it clear rates are going to stay low. i think things will pick up in the second half and i think it is going to be a while. we try to make more loans. we have had record levels of loan grown for three quarters in a row. and that is how you deal with it. you grow your business. >> if you want a service bank. without credit risk that is growing well, it is city national and this is russell
goldsmith. we are back after the break. >> great to see you again. ♪
♪ ♪ [ male announcer ] while you're getting ready for the holidays, we're getting ready for you. tis the season.
for food, for family, and now, something extra -- for you. beware things that are important until they're not.
we were terrified that spain and italy couldn't pay their bills. we knew these companies could not bring down taxes. it turns out that we were afraid that these bonds were bringing the whole world down and we should have been buying them. the europeans offered sensible plans and responsible governments stepped up to increase taxes and cut benefits. if you had been able to borrow a ton of money to buy them it would have doubled. it may have been the single best
investment of the 21st century to date. we are gripped by a similar hysteria about our own country. the fiscal cliff is like what they had in europe. we need to look for companies being obliterated by the cliff. banco santander was perceived to be the biggest loser. but it turned out to be an amazing trade. the stock traveled to $7.72. i don't think it's done. charitable trust is buying a major midwestern lender.
stock has been sliding every day. key is now under $8 and i can tell from the trading in the name it is not going to happen just yet. there are sellers everywhere. the only thing they have going for them is fears of the cliff. we know that when the cliff jump we know that when the cliff jump price , well, i say the worst has been prepared for. key bank may be the worst of the bunch. it has been a terrible investment up until things turned. and then we will look back and say what the heck were we thinking. why didn't we bid 7 and buy key
bank instead of selling it like everybody else? stick with cramer.